Hurry before this loan offer closes

The property is a former shop with living accommodation above which has been poorly converted to fully residential and is in need of full refurbishment. The Borrower intends to restore the property to its previous use as one retail unit on the ground floor and one self contained 2 bed apartment on the first floor. The aim is to create one freehold with two leasehold properties, the shop and the first floor flat.

10% pa for 9 months secured

Outline planning permission has now been granted to return use to mixed use: retail & residential. Town planners are keen to see the property refurbished and no longer an eyesore in the otherwise well kept local community.

The Borrower will also be the tenant of the ground floor retail space for a new branch of his local estate agency business.

There’s currently only £18,000 left for lenders to take this opportunity to earn 10% per annum for 9 months.

Because Lending Based on Past Performance is Far Safer

How many times have you seen that important caveat on investment advertisements?

Past performance is not an indicator of future returns, right? With P2P Lending It Can Be

What happened in the past is no indicator of what may happen in the future. Well, that is absolutely true if your predictions for the future are based entirely on guess work like most investments actually are. The capital price growth of properties, the ability to let a property, the income from rental, inflation rates, voids, management costs, maintenance and repairs – the list of guesses needed to price the ‘hoped for’ returns on an investment property purchased for rental and capital growth is very long indeed.

To qualify these investment decisions the past simply cannot be used as an indicator for the future returns on investment. This is why regulators the world over insist that advertisements carry this disclaimer. But the same is not true of bonds or other contractual obligations. The future return on investment of a contractual return should always be the same as stated in the contract. That sounds a little obvious, but sometimes the obvious needs a little thought.

For example, if a contract states that the borrower will pay 10% per annum for 9 months then the lender knows from the outset exactly how much return he or she will get. Of course, if the borrower were to default then the contractual rate might not get paid. That is why lending institutions the world over seek collateral to a value higher than the loan in order to ensure that, in the unlikely event that a borrower defaulted on their contractual payments, the asset (in our case a property) can be used to recover the loan and any interest due.

Well, BigFi Needs the Answer

Literally every day there are more and more news stories about P2P lending and the importance of the new fintech platforms in altering the shape of the economy.

Normally, a good article on one of the leading fintech websites will justify a comment or retweet, but every now and then someone writes a piece that stands out from all the noise that inevitably comes with a fast growing emerging market.

Writing in Altfi this week James Levy covers a key element of the new market for alternative finance and asks:

I am Guilherme – or Bill to make it easier for the English speaking people – the almost typical nerd. I guess my lack of addiction to comic books takes some percentage points off my nerd-o-meter.

Besides that I am also a husband, father and developer, not necessarily in that order (early mornings my dev personality tends to take dominance over the others – I know, all wrong from the dev perspective, but what can I say; I’m a morning person).

My relationship to Crowdahouse began way before Crowdahouse even existed, when I worked with Gary Corben some 20 years ago. Back then he came to Brazil to start a revolutionary Digital Music project. I was just getting to know html, Photoshop, JavaScript, etc and he was surfing the internet wave with mastery. The perfect older friend any 16-year-old nerd would want. It was the beginning of the earn-money-doing-what-you-like era for me.

There’s so much information out there on the currently hot topic of property crowdfunding platforms, yet with everyone touting their model as ‘the best’, the key differences between peer to peer (P2P) lending and equity crowdfunding may not be that obvious. As an investor or lender you need to make sure that you are aware of the risk and rewards involved in both types of crowdfunding.

So here are the pros and cons of each. Of course, each lending platform offers a different solution and terms, so please check carefully and seek independent advice before making any investment.

We were recently asked some good questions by a new Crowdahouse Member which I thought would be useful to share with you here. Although detailed answers can be found in our FAQs, we realise that you may not have the time to read through them all. So here are your fellow Member’s questions and my answers.

How safe are the Crowdahouse Borrowers?

The Borrower must be a limited company or High Net Worth Individual (HNWI), and provide a property as security in the form of a first charge. The Borrower must also provide answers to a lengthy application form, after which all the information is thoroughly checked by us and the solicitors representing the crowd of Lenders. We turn down all projects that do not meet our strict requirements or that we regard as risky and unsuitable for our Members. And in the unlikely event that the Borrower misses a payment or defaults on the loan, then our proprietary Lenders’ protection system called Crowdasafe™ steps in to administer the property on behalf of you and your fellow Lenders. Any property income is diverted to pay your interest, or if necessary the property will be sold on your behalf to recover your money and any costs.

Owning via a Limited Company Has Never Made More Sense

Like most buy-to-let investors, most of my own buy-to-let properties were purchased in my name. Before the global crash it was easy to get finance as an individual but hard to get it as a company without giving personal guarantees. There were probably twenty lenders for personal borrowing for every one that would lend to a limited company. Few investors took the company route when buying.

Fast forward to 2015 and the Government has changed the rules on tax relief for personal buy-to-let properties when claiming mortgage interest. Actually, it’s confusing to call it a ‘relief’ – it isn’t; it’s a chargeable business cost. The ability to add this cost of borrowing to the rest of your business costs when operating as a landlord is now being phased out.

Funded in One Day

Today one of our Borrowers, Lindsay Naylor, completed on a purchase of a 2 bed mid-terrace in Darlington, Co Durham using funds raised entirely by Crowdahouse® Members.

Lindsay had already entered into an option agreement to purchase the property, but decided to raise money via Crowdahouse to buy out the seller early. The loan was relatively small at £59,500 and was pledged within a few hours of the project going live and completed within a few short weeks during which the Borrower undertook standard purchaser’s conveyancing.

The Crowdahouse Process – It’s Simple

At Crowdahouse, we try to explain our simple lending process as clearly as possible. We want you to fully understand both the risks as well as benefits of lending so that you can make an informed decision. If you’re new to peer-to-peer (P2P) lending and crowdfunding, sometimes it’s easier to just see the whole process in a diagram.

So here’s one we’ve created for you. From here, you can go to our Lenders section of the website and of course our FAQs for a more in-depth level of understanding.

And as always please contact us here if you have any questions at all.